At an industry tradeshow last year, I met some folks who were excited about payments in the marijuana industry. They said they'd formed an ISO and wanted to serve that industry to the exclusion of other verticals. They didn't have any accounts, but said they'd been building relationships with marijuana growers and sellers. They stressed that more states would be legalizing cannabis, and that the federal government was bound to go along eventually. They wanted to get in on the ground floor. Some pretty savvy people at the show overheard their remarks and told me it was absurd to focus on that industry because no banks would agree to process marijuana payments. They would be risking too much because the federal government could shut them down. So is there any real opportunity here?
Geoff Slotter,Merchant Level Salesperson
Because marijuana remains illegal under federal law, when it comes to banking, it doesn't matter whether individual states have legalized marijuana for recreational and/or medicinal purposes: banks would be breaking the law if they were to process payments for marijuana-related enterprises. While laws are subject to change, at this point, there is no money to be made by processing traditional credit and debit card payments for the marijuana industry, because it can't be done.
However, people continue to explore possible alternatives. Recently, for example, SinglePoint Inc. and First Bitcoin Capital Corp. formed a joint venture to develop and distribute a viable payment solution using blockchain technology that can be used by the marijuana industry. SinglePoint President and Chief Executive Officer Greg Lambrecht said, "This Joint Venture with First Bitcoin Capital is perfect timing. Bitcoin payments are catching on and cannabis dispensaries need a solution fast." Whether this will represent an opportunity for ISOs is not apparent.
For now, it seems to make sense to keep an eye on the marijuana industry if it interests you but to not exclude other industries with more immediate potential.
Do you work with or know anyone providing lawful payment services to the cannabis industry? If so, do let us know how it is being done. We'll also appreciate your thoughts on other payments issues and trends at firstname.lastname@example.org, as well as welcome your news at email@example.com.
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